Question

The Rajesh trading company ltd issued 10000 shares of ₹10 each at premium of rs 2 per share payable as follows
On application Rs 2
On allotment ₹6(including premium)
On first and final call ₹4
All the shares were subscribed and the money duly received except the first and final call on 1000 shares. These shares were forfeited and only 800 shares are re issued at ₹8 each as fully paid up

Answer 1

Share Application Entries

Bank A/c Dr. (10,000 x 2)    20,000  

To Share Application A/c (10,000 x 2)                            20,000  

(Being application money on 10,000 shares @ 2 per share received)

Share Application A/c Dr. (10,000 x 2)  20,000  

To Share Capital A/c (10,000 x 2)       20,000  

(Being the transfer of application money, 10,000 shares to share capital account)

Share Allotment Entries

Share Allotment A/c Dr. (10,000 x 6)  60,000

To Share Capital A/c (10,000 x 4)           40,000

To Securities Premium A/c (10,000 x 2)          20,000  

(Being the transfer of allotment money on 10,000 shares @ 4 per share to share capital account and Rs. 2 per share to Securities premium A/c)

Bank A/c Dr. (10,000 x 6)    60,000  

To Share Allotment A/c (10,000 x 6)          60,000

(Being allotment money on 10,000 shares received @ 6 per share including premium)

Share First & Final Call Entries

Share first & final call A/c Dr. (10,000 x 4) 40,000

To Share Capital A/c (10,000 x 4)                   40,000

(Being first & final call money on 10,000 shares @ 4 per share due and transferred to share capital account)

Bank A/c Dr. (9,000 x 4)    36,000

Calls in Arrears A/c Dr. (1,000 x 4)         4,000  

To Share first & final call A/c (10,000 x 4)          40,000

(Being first call money on 9,000 shares @ 4 per share received and for 1000 shares not received and posted to calls in arrears a/c)

Share Forfeiture Entries

Share Capital A/c Dr. (1,000 x 10)   10,000

To Share Forfeiture A/c (1,000 x 6)           6,000

To Calls in Arrears A/c (1,000 x 4)           4,000

(Being 1,000 shares forfeited)

Share re-issue entry

Bank a/c Dr. (800 x 8)     6,400

Share Forfeiture a/c Dr. (800 x 2)  1,600    

To Share Capital (800 x 10)                    8,000

(Being 800 shares re-issued @ 8 per share as fully paid and money received and loss on forfeiture (discount on face value) adjusted to share capital account)  

Share Forfeiture A/c Dr. (800 x 4)  3,200

To Capital Reserve A/c (800 x 4)                  3,200

(Being excess amount received on 800 shares adjusted to capital reserve)